Wednesday, November 26, 2014

If Everybody Is Your Customer, Then Nobody Is Your Customer

One of the biggest challenges business owners must overcome in order to be successful in this new economy, is the dreaded “I-offer-everything-for-everyone” syndrome. On the surface this seems like a sure-fire way to get more customers, but it’s been proven time and time again that it’s not always the most successful way to prosper for of 99.9%. Let’s examine it closer.

If you’re a small business owner, then chances are that you have a limited budget and limited space to work with. So, let’s say for example that you’re a furniture store. If your store offers several contemporary collections, several ultra-modern collections and some eclectic pieces as well as some early American collections scattered throughout you business, do you really think you have enough of any single style to satisfy the type of customer who’s looking for a specific style? The answer is most likely no.

In fact, the most successful furniture retailers in my area focus on a couple of things to attract a specific type of customer, such as:

  • Complete living room packages for under $2,000 or furnish your entire home for under $5,000.
  • Long-term low or no interest financing
  • Fast delivery within 3 days or less
  • Lower prices for packages
 So, by narrowing down their advertising, they attract the types of customers who purchase multiple pieces, which in turn, drive the average ticket sale and profits up. They then offer generous financing terms, which attracts customers with good credit and income, while enticing them to spend more money because the customer has longer to pay for it. Most importantly, the successful retailers in my area price their sales so that the more merchandise the customer buys, the bigger the discount the customer receives.

There is also another twist to these retailers. See, although they attract customers to their business with generous financing offers, they reward their salespeople handsomely for NOT selling the long-term financing, therefore giving their salespeople an incentive to get customers to pay off their balances in less than 30 days. And these are just a few of the strategies that successful businesses use to attract customers without focusing exclusively on price.

There is a common slogan in marketing that states, “There are riches in niches.” Simply put, this slogan means you need to determine who your most profitable, enjoyable and easy to attract customer is, and then specialize in getting more of those customers to come into your business and buy. The best way to do this is to create a U.S.P. (Unique Selling Proposition) that compels your most profitable customer to come back into your business again and again. In other words, a U.S.P. is the thing that you're known for.

The first step in developing a U.S.P. is to determine the profile of your most profitable customer. You will want to know things like; how they found your business, where they live, what newspapers and magazines they read etc.

Here's an example of some of the information that you may discover about your prospects and customers:

  • Wives initially visited your business without their husbands.
  • Recently married
  • Had three kids
  • Lived within five miles of your business
  • Spent between $800 - $1500
  • Paid by Visa, MasterCard or Discover
 Once you have this information, you can redesign your business to cater to more of the same types of customers that are currently spending money in your business.     

However, you can only use this information to your advantage if you take the time to collect it in the first place.  Then you can dig deep and find out who your customer is, what’s important to them and what they truly want.



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